AUD/USD falls below its key hourly moving averages post-RBA
The aussie chopped a little after the RBA released its monetary policy statement but is settling lower now below the 0.7100 handle. Of note, price has broken below the 100 and 200-hour MAs (red and blue lines respectively) as sellers regain near-term control of the pair. Further support is now seen around 0.7064-70.
The RBA didn't change too much in its statement this time around but it was more of the case that subtle nuances in the statement that are helping to give the currency a nudge lower. The most prominent of which is the change to the statement's final paragraph for the first time since February 2018:
Old (March):
Taking account of the available information, the Board judged that holding the stance of monetary policy unchanged at this meeting would be consistent with sustainable growth in the economy and achieving the inflation target over time.
New (April):
Taking account of the available information, the Board judged that it was appropriate to hold the stance of policy unchanged at this meeting. The Board will continue to monitor developments and set monetary policy to support sustainable growth in the economy and achieve the inflation target over time.
This basically solidifies the notion that the central bank has shifted to a more neutral stance and the other minor tweaks in the language suggests that the central bank is hanging all of its hopes on the labour market. Hence, if economic data on that front starts to deteriorate, we should expect rate cuts to follow.
As for trading today, just be wary that there's the federal budget announcement coming later at 0830 GMT. Tax cuts are imminent so that may give the aussie an opportunity to pull off a minor rebound later on. However, do take note that there are large expiries rolling off at 0.7100 as well today. I would expect that (and the key hourly moving averages) to cap any gains from the budget and keep aussie longs honest as bond yields are being nudged lower.
